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Additionally, the QDT strategy aims to take advantage of mispricing in the short-dated options market, making it well-positioned to profit from volatility spikes, especially during turbulent market conditions. These strategies were evident when QDT outperformed the QQQ during significant volatility phases, demonstrating the effectiveness of its approach in uncertain times.

The Risks and Downsides

However, there are inherent risks and challenges with the QDT strategy. The reliance on daily trading of options means that fund performance is contingent on the skills of the fund managers. If the market does not exhibit significant volatility, daily options rarely yield substantial premium income, potentially leading to underperformance against benchmarks.